Home » Kids and College: How to Help Them Without Hurting Yourself Financially

Kids and College: How to Help Them Without Hurting Yourself Financially

One of the biggest financial burdens facing millennials today is the cost of college and subsequent student loan payments that come with a college degree. The latest studies show that the average college graduate in the year 2016 graduated with student loan balances of $37,172. That is a LOT of debt for a 21-year-old.

Similar types of studies done on retirement savings show that 1 in 3 Americans have ZERO saved for retirement, and 56% of Americans have less than $10,000 saved for retirement.

The debt problem is also a problem. Consumer debt loads are rising and people are once again struggling to pay their bills as they continue to depend on other peoples’ money to help them live their lives.

So the question becomes: How can I possibly help my kids pay for college when I’m dealing with lots of debt and/or haven’t even saved enough for retirement?

That, my friend, is the million dollar question, and I’m here today to help you answer it.

My Kids Want to Go to College, But I Need to Save for Retirement and/or pay off debt

It’s a common problem these days. Nearly 30% of Gen-Xers and 28% of Baby Boomers have saved NOTHING for retirement, yet these are the age groups that most commonly have kids heading off to college soon. So, how can they help their kids pay for college and yet still save for retirement? Here are some tips.

Retirement Saving is Top Priority

Friends, the likelihood is that no one is coming to rescue you financially during your retirement years. Your money woes aren’t going to magically “work themselves out” and a check probably isn’t going to just show up in the mail. Lottery and casino expenditures will cause you more financial harm than good and honestly, you can’t really count on social security at this point either.

I watched my grandparents struggle throughout their retired years with not enough to live on. Their children (most of whom were also struggling financially) helped them when they could but didn’t have much to give either.

Don’t do that to yourself. Don’t do that to your children. Make a commitment to be a blessing to your kids and grandkids by having your financial crap together. Make getting your own financial act together your first priority, and go from there.

And don’t fall for the lie that you will just never retire. You may not have a choice. Health problems (which also cost money) may force you into retirement, as may a crumbling economy or some other unforeseen incident. Plan on retiring, even if you think you won’t want to or be able to retire.

Start by Paying Off Your Debt

Debt payments are a surefire retirement plan killer, plus they’ll leave you little money to help your kids pay for college. The more debt payments you have, the more income you will need to survive during retirement and the less money you’ll have to save for retirement.

Pay off your debt – FAST. Use ruthless prioritization, stop spending money on stuff that truly holds no value to you and start making a serious effort to get out of debt. Use the debt snowball or refinance your current loans to get lower interest rates. Cut your expenses down to the bare bones and use the extra cash to eliminate your debt FAST. The sacrifice will be short term and be well worth the effort when you aren’t bondage to lenders anymore.

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Don’t know where to start? Start here:

How and Why You Should Get Out of Debt: Intro

This four-part series will give you everything you need to begin paying off your debt.

Your Debt Freedom Plan: The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness

Save at the Same Time

Some experts recommend dumping all consumer debt before starting a savings plan. I disagree. If you’re behind on your retirement savings you need to start saving money for retirement now. If you don’t have an emergency fund you need to start contributing to one now. And you need to develop a habit of saving money now.

Participate in your company’s 401(k) program – especially if it has a matching plan – and/or start socking away just a little bit each month into an IRA, Roth or traditional.

The smartest retirement book: The Smartest Retirement Book You’ll Ever Read: Achieve Your Retirement Dreams–in Any Economy

You need to have the gift of compounding interest working for you, so start putting money away for retirement today, even if it’s only a small amount of money each month.

The same advice holds true for an emergency fund. If you don’t have one, commit to starting to save in one today – even if it’s only one or two percent of your take-home paycheck. Just start putting away something.

Helping Your Kids With College Costs

If you are making debt payoff and retirement savings your top priority, and you still want to help your kids with college, there is going to have to be some compromise on both sides.

    1. First, let your kids know the scoop. Be honest with them. Tell them that your finances aren’t what they should be but that you’ve put a plan in place to change that. Tell them that you want to make yourself financially strong so that you aren’t a burden to them when you’re older.
    2. Second, have a thorough discussion with them about their college plans. Make sure that each side knows what the other is planning and thinking. Be clear with them that you won’t be able to pay fully for college but that you want to help as much as you can while making your own financial journey a priority.

This book is full of awesome ideas for helping kids minimize college costs: Debt-Free U: How I Paid for an Outstanding College Education Without Loans, Scholarships, or Mooching off My Parents

3. Third, try and encourage them to minimize college costs for their own sake. Look into all options for schools. Encourage them not to choose a school just because their BFF is going there or because they want the status of the school name on their wall, but encourage them to be wise about costs and check out all options, such as:

  • Checking out the prices of several different schools
  • Searching out and applying for all available scholarships and other financial aid options
  • Completing their first two years at a qualified community college and then transferring from there
  • Reselling, instead of keeping, used textbooks to buy other things
  • Living at home and going to a local school to cut down on costs
  • Working to save as much as they can before they go to school to cover tuition costs
  • Checking out colleges with a work program to offset tuition costs

4. Do what you can to help, whether that be allowing your college student to live at home rent free while in school, offering to pay what you can afford as you improve your own financial situation or helping them find and apply for scholarships. Some parents also get a second job for the sole purpose of putting that second job’s income toward a child’s tuition. Assess your own life and figure out how you can help your child without hurting yourself.

There are many ways to help your kids through college without putting your own self in financial jeopardy. The first and most important way you can help is by knowing your own financial situation and having a solid plan for getting it on track.

Don’t fall for the lie that college is a must, and that you as a parent are responsible for paying for your kids’ college costs.

Do your kids a favor and let the responsibility for that fall on them. One of the best gifts you can give your kids is to teach them that they have the physical and mental capability to figure out how to pay for college all on their own.






  1. Brian says:

    As parents we all want the best for our kids, but we can’t sacrifice our futures to give them a college education. It all starts with a conversation, as early as possible and letting your children now where you stand financial and how much help you many or many not be able to assists. Don’t underestimate your kids.They are smart and relisant, but they need to be given as much information as early as possible.

    • Laurie says:

      Yes!! I think it’s easy to want to rescue your kid from ever potential trouble by simply handling it yourself, but you do them a better favor by allowing them to work their way out on their own. Teaches valuable life skills!

  2. I really appreciate your advice here, Laurie. I think there has to be something in between strapping teenagers with tons of debt to pay for school, and parents jeopardizing their financial futures to shell out for college. Your tips are great. I agree that community college and comparing costs of different schools is huge, as well as ensuring that college seems to be the best option for your child. I would add that I think it’s unwise to put huge pressure on kids to earn big scholarships as a way to avoid saving for college. Of course students should exhaust scholarship options but I hear parents of toddlers talking about putting their kids in lots of activities, paying for college through sports, or hiring tutors starting in middle school so their kids score high on entrance exams. It’s fine to support kids in their interests and apply for scholarships, but putting pressure on kids to earn a free ride is just too much.

    • Laurie says:

      Wise comment, Kalie!!! We cannot pressure our kids to that level. I’ve seen it happen as I observe other parents and watched some kids end up in psychiatric care because of the pressure. We have to be careful to educate and encourage without exhaustion. For me, that’s one place where a relationship with Christ is such a blessing. It helps me to keep things in perspective and remember that He’s got our backs.

  3. From an early age, my parents had me save any earnings towards college. My grandparents would give me some money when I was younger than ten and that would all go towards college. I got to college with about $20k saved up!

    What I wish I would have figured out earlier were expense fees… I’m pretty sure the funds we were invested in were actively managed… ugh, makes me sick thinking about it but what can I do now!

    • Laurie says:

      Erik, that is terrific that you got to college with so much saved up – good for you! We are teaching our college bound kids to do the same. I know it will be a blessing to them to have that cash set aside.

  4. Kathy says:

    First of all, I don’t think all kids need or are cut out for a university education. There are many programs in vocational schools, trade schools etc. that get students certified for a great career in two years or less. We will always need auto mechanics, plumbers, HVAC technicians, CAT scan technicians etc. but we may not need philosophy majors. These careers make good money. Work is started two years (or sooner) earlier. They are less costly and therefore more affordable with less or zero student debt. In my opinion a highly intelligent way to go for many students.

    Now, let me tell you how we put our son trough a Master’s program with zero debt. We started saving for his college almost as soon as he was conceived. We made a contribution to it every single month. Sometimes if money was tight, we could only put in $25. But it went in every month. I started out in passbook savings at our credit union, they purchased some CDs and finally when we got minimum deposit together, I went into mutual funds As our income increased, we were able to increase the monthly contribution. For his part, our son worked in high school in the evenings, weekends and summers when he wasn’t involved in sports. Being a brilliant (!) kid, he took AP tests and tested out of about 3-4 classes which saved him a full semester. He also earned a couple of scholarships….one for all four years. He never changed his major once in school as that frequently sets a student back in their pre-requisites. When he graduated and was accepted into grad school, he earned a scholarship that paid full tuition and the school granted him credit for a full semester of classes, due to the difficulty of the classes he took as an undergrad. Since he had to live off campus, we paid his living expenses and didn’t ask him to work since we wanted him to concentrate on finishing his degree.

    Throughout this time, we never scrimped on paying into our retirement. That was always maxed out. What we did scrimp on was vacations, eating out, fancy cars and new furniture. I do admit that for a great deal of the time, we made decent income that allowed us to do this, however, we were nowhere near the top income bracket. Pleas pardon the lengthy post. I just wanted people to know it can be done.

    • Laurie says:

      Kathy, yours is exactly the kind of comment I love publishing. You speak the truth with real-life experience to back it up. My two favorite statements were “We never scrimped on paying into our retirement…..what we did scrimp on was vacations, eating out, fancy cars and new furniture.” And then ” I don’t think all kids need or are cut out for a university education.”

      AMEN! The schools have conditioned kids to think it’s a must, and it’s not. Where would we be without electricians, HVAC techs, etc? And where would we be without blue collar workers like my brother that haul garbage? People need to do what they love and feel led to do, not what society tells them to do – at least as long as they can make a living at it. 🙂

  5. You really do have to take care of yourself first. It also just happens to be good financial advice.

    There are a lot of competing opinions out there on student debt, but I think it’s the very best debt you can take on because it’s the only one with a net positive expected return (provided that you finish and get your 4 year degree). Now, it doesn’t work out for everyone, but it’s undeniable that on average that workers with a degree earn more and weather recessions better than the average worker without a degree: certainly enough to justify the $30k of debt they’re likely to graduate with.

    If you can avoid that debt, by all means do so. But don’t avoid college just to avoid the debt: that’s a life limiting strategy, in my opinion.

    • Laurie says:

      Thanks for sharing your thoughts – always appreciated, DB40. The other end of the spectrum is don’t drag your student loans out for ten, twenty, thirty years or more just to get a degree. I see so many 50+ year olds who are still paying on student loans.

  6. Great article, Laurie! “Do your kids a favor and let the responsibility for that fall on them.” As a parent of teens, I subscribe to this every day. I provide information and guidance but, in the end, they are responsible for their decisions.

    We’re approaching college with an open mind and will support them however we can without sacrificing our own finances. They know they will have to cover a significant portion of the cost themselves. That said, my son doesn’t want to go to college right away, but has expressed a strong interest in military service, so we are trying to educate him (as much as we can) on the costs/benefits of this choice.

    • Laurie says:

      That is such smart advice, Amanda. Our job as parents is to give them all of the information so that they can make wise decisions. I hope they do so!

  7. Yes! In my opinion, parents ARE NOT obligated to pay for their kids’ schooling. It’s a gift and a privilege to have parents help you with school. I was very privileged to have help from my parents for school living expenses and my student loans. But we should have made a more financially-sound game plan. I should have done community college courses and gone to a more affordable public college.

    I’m now working towards FIRE so I’ll have the freedom to help our kids with school if that’s what they want to pursue after high school. I love the hand up that I got and I do want to give my kids the same help–just in a way that doesn’t wreck our finances.

  8. “Searching out and applying for all available scholarships and other financial aid options”

    It’s crazy how many people I’ve shared this advice with who respond with something like “it’s SO much work”. Yeah, it’s work, but you are also basically “getting paid” for doing it.

    • Laurie says:

      A friend and I were talking about hourly wage in regards to scholarship applications. Even if the scholarship is “only” worth $500 and you get it, that’s a heck of an hourly wage!

  9. Josh says:

    My parents & my wife’s parents were both late to the retirement savings/debt payoff game and both of us had to find our own ways to pay for college.

    My parents did help with some small expenses like getting us (my brother & I) to & from school on holidays and they gave us both a little spending money each year. But, we paid for almost our entire college degree & worked part-time during the school year.

    We plan on covering all four points with our children. I don’t know if we will start up a 529 plan, partially because we have our own finances to take care of & we aren’t sure how many of our children will actually attend a traditional school since they are still infants. If so, I can always at least put some money away in their teen years.

    P.S. Our new baby still hasn’t come yet, hopefully very very soon.

    • Laurie says:

      I think you guys have a great plan, Josh. You’ll definitely be doing your kids a favor by having your own financial ducks in a row. It makes a difference! Oh my gosh – can’t wait to hear about the baby!

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